// eor vs entity
When does an EOR stop making sense?
Every provider tells you their answer. Ours is arithmetic: the sourced cost of forming and maintaining your own entity in a country, against the median published EOR fee among providers that cover it. Salary and statutory employer costs are excluded from both sides, because you pay those either way — this compares the overhead alone.
Australia: break-even at roughly 1 employee
At 5 employees, EOR fees exceed the high end of entity overhead — the entity route likely pays for itself.
EOR fees / year
$24,000
5 × $400/mo median fee (21 priced providers)
Own entity / year
$1,400–$3,000
accounting, filings, statutory compliance
Year one, entity route
$2,400–$5,100
setup $1,000–$2,100 + first-year compliance
annual overhead vs team size · employees along the x-axis
The sourced dataset
Entity costs vs EOR fees, by country
Setup is the one-time cost of forming the entity (excluding share capital, which stays your money). Annual is the recurring compliance overhead: accounting, statutory filings, secretarial and local requirements for a small foreign-owned subsidiary. Break-even is the team size where a year of EOR fees at the median published rate crosses that annual overhead.
| Country | Entity setup | Entity annual | Median EOR fee | Break-even |
|---|---|---|---|---|
| Australia | $1,000–$2,100 | $1,400–$3,000 src | $400/mo | ~1 employee |
| Brazil | $1,000–$4,600 | $12,000–$35,000 src | $400/mo | ~2.5–7.3 employees |
| France | $2,700–$9,000 | $2,200–$7,000 src | $449/mo | ~1–1.3 employees |
| Germany | $1,600–$5,400 | $3,200–$8,600 src | $400/mo | ~1–1.8 employees |
| India | $250–$600 | $500–$1,800 src | $400/mo | ~1 employee |
| Netherlands | $1,300–$2,700 | $1,600–$4,300 src | $400/mo | ~1 employee |
| Singapore | $250–$1,200 | $1,200–$4,000 src | $449/mo | ~1 employee |
| United Kingdom | $200–$1,000 | $1,300–$3,900 src | $400/mo | ~1 employee |
| United States | $500–$1,500 | $2,400–$4,700 src | $400/mo | ~1 employee |
Ranges compiled as of 2026-07-12 from official registries and reputable formation and accounting guides (per-row source links). Median EOR fee = the median published base price among providers covering the country in our dataset. Indicative, not advice: complex payroll, audits past size thresholds, resident-director requirements and banking friction can move the entity side materially. Countries appear here only when we could source both cost ranges.
Before you decide
What the arithmetic leaves out
- Time: an EOR onboards in days; an entity takes weeks to months, plus bank account friction for foreign parents.
- Liability: with your own entity, employment risk and statutory filings are yours, not a provider’s.
- Locked capital: some countries require share capital (Germany’s GmbH: EUR 25,000, half paid in) — your money, but parked.
- Winding down: closing an entity costs real money and time; leaving an EOR is offboarding fees at most.
- Payroll itself: an entity still needs someone to run local payroll — software or a local payroll provider, per head.
The honest summary: below the break-even zone an EOR is usually cheaper and always faster. Well above it, the entity route wins on cost — if you have the headcount stability to commit. Around the crossover, the soft factors above decide. Estimate the full per-employee cost with the calculator →